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The content is based on the responses of 213 senior business decision-makers across five key countries: Australia, China, Indonesia, the Philippines and Singapore. It analyses the state of D&A maturity across the Asia-Pacific region.

Vietnam

Key messages

Customs rules are complex and the GDC now aggressively conducts post-entry audits. An oversight at the entry stage may have substantial consequences for importers if the issues it is identified during an audit. On the other hand, various duty savings opportunities may be identified from an in-depth understanding of customs rules and practices.

The primary enforcement agency with respect to cross border trade in Vietnam is the General Department of Customs (GDC).

As a member of the World Trade Organization (WTO), the country uses the valuation methods identical to those under the WTO Valuation Agreement. Vietnam is also a member of the World Customs Organization (WCO) and uses the Harmonized System for the tariff classification of its imports and exports.

Non-tariff barriers such as import restrictions, import licensing requirements, labeling, and other administrative requirements also apply.

Duties are generally assessed in Vietnam on a Cost-Insurance-Freight (CIF) basis for imports. Exports are assessed on a Free-On-Board (FOB) basis while inland cross-border transactions are assessed on a Delivery-At-Frontier (DAF) basis.

The primary method of customs appraisement in Vietnam is transaction value. Any doubts cast by the GDC on the transaction value may lead to the use of other valuation methods under the WTO appraisement hierarchy.

Special Consumption Tax applies to importation of certain products including alcohol, cigarettes, automobiles and gasoline. Special Consumption Tax rates vary from product to product.

Import Value Added Tax (VAT) rates of five percent or 10 percent are imposed differently on a product-by product basis and are assessed based on landed cost (i.e. the CIF or DAF value of goods + import duties + Special Consumption Tax). Certain imports are VAT exempt.

A number of commodities require special permits and licenses from certain government agencies prior to their importation to Vietnam. Examples of these commodities are food and medicines, books and cultural items, animal products, as well as industrial explosive materials.

Import entries must be filed with local customs agencies regardless of whether or not the imported goods are subject to duties. Entries must be accompanied by supporting documents (including the sales contract, commercial invoice and bill of lading). The customs declaration dossiers are usually declared by the owner of goods, authorized persons, transporters or customs brokers. Payment of duties and taxes are made directly to the State Treasury.

Vietnam customs rules are complex, frequently amended and are often subject to varying interpretations. Companies must stay informed of changes as post-entry audits are aggressively conducted by the GDC.

Subject to certain conditions, a number of items may be imported free of duty into Vietnam such as machinery and equipment for encouraged sectors. In addition, duties on materials imported for the production of export products may be suspended for 275 days, also subject to certain conditions set by government.

Vietnam is party to a number of FTAs, including the ASEAN Free Trade Area, the ASEANChina FTA, and the ASEAN-Korea FTA. Negotiations are underway for more FTAs.

In order to qualify for preferential duty rates, a company must comply with the rules of origin under that particular FTA. These rules have varied criteria (e.g. regional value content and/or tariff shift) which apply to different products under different FTAs.

Duty exemption is applied to certain goods imported to form fixed assets of encouraged investment projects, and goods imported under an Official Development Assistance (ODA)- funded project. A five-year duty exemption is granted to materials and semi-finished goods which could not yet be produced locally and are imported for encouraged investment projects and certain sectors, including the production of electrical, electronic and mechanical parts.

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